MOSCOW – Saudi Arabia on Friday laid to rest any lingering concern that the world's biggest oil exporter might consider backing a Muslim-wide oil embargo in support of the Palestinian cause.
"This is like cutting off your nose to spite your face," Saudi Foreign Minister Prince Saud al-Faisal told reporters in Moscow after meeting Russian President Vladimir Putin.
The Saudi minister was responding to questions about how Riyadh would react to Iraq's call for backing in its 30-day oil embargo, launched last week to protest Israeli military incursions into Palestinian areas of the West Bank.
He underlined Saudi support for the Palestinians but said Riyadh saw oil as a resource for investment and development rather than an economic weapon.
"Oil is not a weapon. Oil is not a tank," he said. "Saudi Arabia will continue to produce oil."
Baghdad says it could extend its ban if Israel does not complete an unconditional withdrawal by May 8. In 1973, Arab producers including Saudi Arabia enforced a ban on oil sales during the Arab-Israeli war to punish the West's support for Israel.
Iraq's embargo cuts four percent of world oil exports but costs Iraq little because the United Nations controls revenues from Iraqi oil sales under its oil-for-food program, an exception to Gulf War sanctions.
Iraq is continuing to export to neighboring countries who pay directly to the government of President Saddam Hussein.
The Iraqi stoppage comes as Baghdad seeks to rally support in the Arab world against the possibility of a military strike by the United States.
By supporting the Palestinian cause, Baghdad makes it difficult for Saudi Arabia, an adversary since Iraq's 1990 invasion of Kuwait, to join any alliance against Iraq. Iran and Libya have said they would support the Iraqi embargo but only if there were a Muslim-wide ban, a policy ruled out by Saudi Arabia and its oil-producing Gulf neighbors.
SUPPORTING GROWTH
The Saudi minister also said Riyadh would seek to ensure that world economic recovery was not damaged by Saudi export policy.
"Saudi Arabia and Russia ... aim to ensure healthy economic demand for oil and healthy economic growth," he said.
Oil prices have risen sharply since the beginning of March, raising concern that inflated energy costs might slow a renewed upturn in world economic growth.
Worries over the violence in the Middle East have combined with stringent output cuts by the Saudi-led OPEC and independent producers, including Russia, to lift Brent crude from $20 to $25 a barrel.
Russia decided to cut a small volume of crude exports at the start of the year under pressure from OPEC, and Saudi Arabia in particular, to support prices hurt by an economic slowdown.
Moscow is expected to lift export constraints at the end of June. Supply data suggests Russian exports have risen despite Moscow's cooperation with OPEC.
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